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MOFET - R&D in the Manufacturing Industry

The manufacturing industry struggles to cope with increasing global competition. The Innovation Authority provides a variety of incentives designed especially to meet these sectors’ needs and to encourage innovation in them.

Goal of the incentive program:

To encourage export-focused enterprises to promote and implement innovative technological processes, by implementing R&D programs aimed at the development of innovative products, improvement of existing products or the development and improvement of manufacturing processes with the objective to enhance productivity and create technological differentiation that will achieve competitive advantages in the local and global markets.

Who is the incentive program for?

A corporation or industrial factory that was incorporated in Israel and that meets one of the following conditions:

1. At least 50% of its revenues in the previous year stems from industrial manufacturing in the technology sectors:

  • Traditional, such as: food, beverages, tobacco, textiles, clothing, leather, wood products, paperproducts, printing;
  • Mixed-traditional sectors such as: rubber, plastics, metals, ceramics, building materials.

2. At least 50% of its revenues in the previous year stems from industrial manufacturing in the technology sectors:

  • Mixed-high-tech sectors such as: chemicals, cosmetics, arms and ammunition, electric equipment, manufacture of machines and motor vehicles, and medical, dental and orthopedic equipment;
  • High-tech, such as: pharmaceuticals, computers, electronic equipment, optic equipment, aircraft and spacecraft manufacture.

For a corporation meeting both these criteria:

  • The number of manufacturing personnel is at least 30% of its total employees, but not less than three workers.
  • The number of R&D employees is no more than 10% of its total employees, but not more than 25 workers.

Companies that wish to determine whether their activities qualify for participation in this incentive program can apply to the Authority, requesting it to carry out a preliminary examination regarding their affiliation to the traditional industrial sectors.

What do you get?

Support of between 30%-50% of R&D expenses of the approved programs: An increment of 10% for R&D projects in Area ‘A’ Development Regions and an increment of 10% if at least 30% of the project’s authorized budget is implemented in a recognized research institute.

Recognition of unique R&D expenses for all companies meeting the program’s conditions such as:

  • Expenses for the development of molds that will be later incorporated into the company’s production line, with a budget up to NIS 500,000.
  • Direct expenses for the development of unique production machinery and the construction of these machines’ prototype with a budget up to NIS 500,000.
  • Expenses for the acquisition of knowledge that constitutes an integral part of the R&D program with a budget up to NIS 250,000.
  • Expenses for product commercialization and marketing activities, of up to 15% of the approved budget plan.

Special benefits for the first 3 R&D projects submitted by companies that manufacture in Israel:

  • Exemption from paying royalties (for requests submitted until 31.12.2020).
  • The level of support for authorized R&D programs will stand at 50% of the approved budget.

Following the period of exemption from royalties payments, these companies (except high-tech industrial manufacturing companies) will be eligible for a decreased rate of royalties payment of 1.3%.

Clarification: High-tech industrial manufacturing companies, as defined above, are not eligible for a discount in their royalty payments.

Why should you apply for this incentive program?

Favorable and customized terms: This incentive program offers all low-tech enterprises preferential terms adjusted to their needs, in order to implement development programs for future products and innovative technologies that will provide the companies with a competitive advantage and allow them to penetrate new markets.

Benefits to companies just starting their R&D activities and that manufacture in Israel: This incentive program offers particularly beneficial conditions and exemption from paying royalties to companies that are at the beginning of their R&D activities and manufacture their products in Israel, in order to facilitate strategic decision-making to enter into and carry out an R&D program (subject to the approval of the Authority Council).

For further details: MOFET - R&D in the Manufacturing Industry

 

R&D Preparatory Incentive Program for Companies in the Manufacturing Industry

The preparatory incentive program is a complementary tool operated by the Innovation Authority for the manufacturing industry sectors. This tool is intended to assist companies without prior R&D experience in leading innovation processes, or for companies that require focus and guidance with their R&D activities.

Goal of the incentive program:

To create an innovation-focused change in companies from the manufacturing industry sectors, that will increase the competitiveness of the participating companies.

The preparatory incentive program has 4 secondary tracks:

  1. Basic Support Track: the objective of this track is to assist in formulating new products or processes. In this track, a technology consultant will assist the applicant in implementing a process of mapping and examining technological capabilities in order to formulate innovative ideas.
  2. Technological Feasibility Examination Track: this track involves a process of assessing technological feasibility under the guidance of a technology consultant who will assist the applicant in the initial process of reducing technological risks.
  3. Developing Solutions for Flaws in the Production Process: in this track, the consultant will analyze a specific technological problem that characterizes a flaw in the production process and will assist in formulating recommended solutions.
  4. Improved Production Process: the consultant will analyze the production processes in order to streamline them by assimilating innovative technologies improvements aimed at improving productivity.

Who is the incentive program for?

An Israeli industrial company that meets one of the following conditions:

  • The majority of its income stems from manufacture of products in the traditional technology sectors or in the mixed-traditional technology sectors. The sectors include: food, beverages, textiles, leather, wood, paper, oil products, rubber, plastics, metals, building materials, machine maintenance.
  • The majority of its income stems from industrial manufacture of products in the mixed-high-tech technology sectors including: chemistry, arms and ammunition, electric equipment, manufacture of machines. Furthermore, the number of the company’s manufacturing personnel is at least 30% of its total employees, but not less than 3 workers; and the number of R&D employees no more than 10% of its total employees, but not more than 25 workers.

What do you get?

Support for 66% of the approved budget (maximum budget NIS 75,000) and support for 75% of the approved request’s budget (maximum budget NIS 100,000) for Area ‘A’ Development Regions. The support includes the consultant’s fee, market surveys, technology and patents, laboratory tests, purchase of materials and specific equipment, additional technology consultants’ fees and other miscellaneous expenditures related to the approved program.

Why should you apply for this incentive program?

Identification of Technological Gaps: Companies applying for the R&D preparatory incentive program will receive professional consultation to assist them in identifying technological gaps in their current capabilities, locating directions for possible development, identifying flaws in the production process, improving the production process and, when necessary, in preparing for implementation of a more comprehensive R&D program (together with the support of the Innovation Authority).

For further details: R&D Preparatory Incentive Program for Companies in the Manufacturing Industry

 

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